1995 (4) TMI 90 - AT - Income Tax

Summary

Issues:
1. Interpretation of time limitation under section 206 of the IT Act for filing returns.
2. Imposition of penalty under section 272A(2)(c) for not filing returns under section 206.

Analysis:
1. The Tribunal was asked to refer questions regarding the time limitation for filing returns under section 206 of the IT Act. The Tribunal held that no time limitation was prescribed under section 206 for filing returns on Form No. 24, as the section only referred to preparation before a specific date. The returns were prepared by the assessee before the due date but were not filed in time with the IT authorities due to a misunderstanding by the Post Master. The Tribunal found no default in tax deduction or payment and considered the delay in filing a technical default. Penalties were deleted based on these findings.

2. The imposition of penalties under section 272A(2)(c) for not filing returns under section 206 was challenged. The Tribunal, following a previous decision, held that the default in filing returns was technical, not warranting a penalty. The Tribunal noted that the assessee had prepared and submitted the returns promptly upon receiving show-cause notices. The Tribunal considered the overall compliance history of the assessee for other financial years and concluded that the penalties were unjustified. The Tribunal dismissed the reference application by the Revenue, stating that the questions raised did not involve points of law but were factual determinations.

3. The assessee's counsel argued that the amendments to section 206 introduced in 1991 clarified the duty to deliver returns to IT authorities, which was not present before. The counsel contended that the Tribunal's decision was based on a plain reading of the section and factual analysis, not warranting a reference to the High Court. The Tribunal agreed with the counsel's arguments, emphasizing that the nature of the default was a factual determination and not a legal question. Therefore, the Tribunal declined to refer the questions to the High Court and dismissed the reference application by the Revenue.